The influence operations began quietly in Ukraine, long before Russian agents infiltrated regional administrations in the east of the country, helping pro-Kremlin separatists take them over with ease. Ukrainian politicians had by then long been warning of the corrosive power of Russian black cash, the influence of which had been felt in the shadowy gas-trading schemes believed to have corrupted and undermined a succession of Ukrainian presidents. Its presence was perceived in Russia’s growing investment in the activities of the Russian Orthodox Church, whose roots stretched historically deep into Ukraine. Long before the region was taken over by the pro-Kremlin militants, Russian Orthodox priests would call during prayers for Moscow to save ‘Holy Rus’, the name for the cradle of Russian empire founded centuries before in Kiev, which united Russia, Ukraine and Belarus. Increasingly, Russian Orthodoxy was being promoted as a counterpoint to Western liberal values, its reach funded by deep-pocketed Russian Orthodox oligarchs, first in Ukraine and then deeper into the West.
Among these Orthodox oligarchs were Vladimir Yakunin, the former KGB Russian Railways chief, and Konstantin Malofeyev, the cherub-faced associate of the Geneva network of money men, a protégé of Serge de Pahlen and Jean Goutchkov, the imperialist-minded Geneva-based White Russians who were close to Putin and his oil trader ally Gennady Timchenko.
When he first met de Pahlen in the dim and spectral light of St Petersburg’s St Peter and Paul Cathedral, Malofeyev was a seventeen-year-old monarchist.[1] The last direct heir of the Russian tsars, the Grand Duke Vladimir Kirillovich, was praying for the first time at the burial place of his ancestors, and the Soviet Union was entering the final month of its existence. The relationship Malofeyev forged with the tall and stooping de Pahlen that grey November 1991 day, like Putin’s before him, turned into an enduring one. De Pahlen ‘played a big role in my personal fate’, said Malofeyev. ‘He’s a unique person. The whole of Russian history flows through him.’[2] Malofeyev was to become an integral part of a network of KGB men and imperialists that sought to restore Russia’s imperial power after Putin took the presidency. His supporters liked to boast that he was Russia’s version of George Soros, the billionaire financier who’d dedicated much of his fortune to encouraging liberalism in the countries of the former Soviet bloc. But of course Malofeyev was also the antithesis of him.
In 2005, at the tender age of thirty-one, Malofeyev became the founder of an investment fund, Marshall Capital, that quickly grew to hold more than $1 billion in assets in telecoms, children’s food manufacturers, hotels and real estate.[3] He never disclosed who his investors were,[4] but at around the same time, together with de Pahlen, who served on the board, he established a Russian Orthodox charity, the Foundation of Saint Vasily the Great, ostensibly to support the spread of Orthodox values and conservative ideals across Ukraine, Europe and then into the US.[5] He soon gained high-level backing from the inner circle of Putin’s KGB men, and by 2009 he had gained an inside role as an independent director on the board of state telecoms giants Svyazinvest and Rostelecom, just as they were undergoing a sweeping restructuring.[6] While Malofeyev’s partner from Marshall Capital took over the role of Rostelecom’s president,[7] the Bank Rossiya-controlled Gazprombank began quietly buying a 7 per cent stake in Rostelecom on Malofeyev’s behalf.[8] It was a creeping takeover that helped Malofeyev’s close partners, just like Yakunin, benefit from billions of roubles in Russian state contract cash. Rostelecom disbursed over 12 billion roubles in contracts, more than 80 per cent of the total, to a company headed by another Malofeyev ally from Marshall Capital.[9] ‘Malofeyev became the centre for siphoning cash out of Rostelekom,’ said Yevgeny Yurchenko, the former head of Svyazinvest, which was later subsumed into Rostelecom.[10]
The state support rapidly turned Malofeyev into a billionaire, while the funds under management by his Marshall Capital grew faster still. It turned out there was a reason for this. Malofeyev’s St Vasily the Great Foundation was to become an integral player in the Kremlin’s growing political project to expand Russian influence; and Malofeyev would be a front man in Russia’s battle for empire against the West. He was part of a process that began soon after Ukraine’s pro-Western turn in the Orange Revolution, when the Kremlin started creating a network of Russian non-governmental organisations and state proxy groups that first sought a toehold in Ukraine, and then expanded into the West. Their mission was to counter US-funded non-government organisations such as the National Endowment for Democracy, Freedom House and George Soros’s Open Society, which was despised most of all by Putin and his cronies.[11] Putin’s KGB men believed that these groups had conspired with the US State Department to diminish Russian influence in Ukraine. In the Kremlin’s eyes, their focus on human rights, civil liberties and supporting democracy was no more than a cynical pretext to pull the former Soviet states, which Moscow always considered its own backyard, into the West’s orbit.
Unlike Soros, a public figure, Malofeyev operated in the shadows. He never disclosed his budget or what he was up to. And instead of the liberal openness Soros’s Open Society sought to promote, Putin’s men wanted to advance an ideology, based on the shared Slavic values of Russian Orthodoxy, that preached almost the opposite of Western liberal values of tolerance. Russian Orthodoxy saw itself as the one true faith, with everything else considered a heresy. Individual rights, it preached, must be subordinate to tradition and to the state, and homosexuality was a sin. Putin’s KGB men had chosen an ideological rationale for the drive to restore Russian empire that resonated with those who felt left by the wayside in the tumult of globalisation, as well as with base innate prejudice. They turned to once-marginalised philosophers such as Alexander Dugin, a long-bearded political thinker straight out of the pages of a Dostoevsky novel, to propound theories of Russia’s destiny as a Eurasian empire that would take its rightful place as the world’s one true power, as the Third Rome. They had been grasping for an ideology that would unite their allies against the liberal West, and Putin had long been discussing these ideas, and those of other exiled White Russian imperialists, with de Pahlen and the other Geneva money men. Their words, it seemed, made a deep impression on him. ‘We were very lucky with this group,’ said Malofeyev. ‘This civilisational project arose because of their background and their understanding of the past and the future of the country. Putin spoke a lot with them.’[12] The KGB had dabbled in cultivating Russia’s far-right nationalist and imperialist groups ever since the Soviet collapse. But after Ukraine’s Orange Revolution in late 2004, gradually, almost imperceptibly at first, they were pulled in from the fringes, slowly gaining access to a steady stream of financing.
Malofeyev and Yakunin – through the Russian Orthodox charity he founded, Andrei the First-Called, named after the Apostle St Andrew – were far from the only ones mobilising. Russia’s growing official, and unofficial, wealth meant that increasing amounts of cash were poured into a web of state agencies created to promote Russian ‘soft power’ abroad. These included Rossotrudnichestvo and Russky Mir, or Russian World, created in 2008 and 2007 respectively.[13] They ran cultural and language programmes for the Russian diaspora and beyond, pouring millions into promoting the Kremlin’s version of events. As Russky Mir put it, they were providing ‘objective information’ on contemporary Russia and its citizens. But their budgets were always murky, and according to a former senior Soviet foreign-intelligence officer, they were essentially fronts for Russian intelligence.[14] Neither Rossotrudnichestvo nor Russky Mir ever published financial reports, and while state support for such operations was estimated (based on a government website listing state contracts) at about $130 million in 2015, that figure was not a reflection of the total funding, because support was also procured by the Kremlin from oligarchs.[15]
A myriad of other proxy organisations also went into action. Russian Cossack groups ran paramilitary youth camps. A gang of motley bikers known as the Night Wolves, that served alternately as propaganda and paramilitary group, won Putin’s express support. Four years before his ‘little green men’ appeared to take over the Crimean peninsula, Putin rode triumphantly into Crimea with a leather-jacketed, bandana-wearing gang of Night Wolves on an enormous three-wheeled Harley Davidson, kicking up clouds of dust as they roared in.[16] No one has ever been able to calculate the total funding for such groups. The Night Wolves, for instance, were granted eighteen million roubles in Kremlin funding in 2014, one of the largest such grants, for ‘the patriotic education of youth’.[17] But as the Kremlin – and the FSB in particular – could turn to any businessman or illegal slush fund for support, unofficial sources of cash were also readily on tap.
The Ukraine operation began almost imperceptibly. When a ragtag group of pro-Russian separatists established the ‘Donetsk Republic’ political movement in eastern Ukraine in 2005, shortly after the Orange Revolution, no one took them particularly seriously. Its leaders were seen as ‘three crazy guys’,[18] and none of their biographies seemed to amount to much: one of them, Andrei Purgin, a thickset Russian nationalist with a wiry beard, appeared to have had seventy different jobs, including a stint in the circus, before he settled for a life as a separatist.[19] The group held sparsely-attended rallies calling for Donetsk to be granted a special federal status closer to Russia. They handed out forlorn-looking pamphlets condemning Ukrainian nationalists as fascists. And they began to forge loose affiliations with the newly-created Kremlin-sponsored Russian nationalist groups, attending Kremlin youth camps and joining a Eurasian Youth movement founded by Alexander Dugin, with whom Malofeyev also worked.[20] For a time, Ukraine’s pro-Western government banned the Donetsk Republic, but it continued operating underground. ‘They travelled to Moscow and took part in the programmes of Rossotrudnichestvo,’ said Konstantin Batozsky, an aide to one of Donetsk’s former governors and leading industrialists, Sergei Taruta. ‘They were never taken seriously.’[21] Even the pro-Kremlin administration of Viktor Yanukovych mostly ignored them.
At some point, however, things changed. By 2012 the Donetsk Republic movement had enough wherewithal to open its own ‘embassy’ in the headquarters of Dugin’s Eurasian Youth movement in Moscow, where they handed out passports to the Donetsk Republic, unrecognised by anyone.[22] And then, one day, according to Batozsky, as Ukraine tumbled towards chaos during the Maidan Square protests in January and February 2014, several unidentified Russians appeared at the self-styled embassy and told the leaders of the Donetsk Republic they had to work now, and that Russia would be behind them.[23]
When Yanukovych fled soon after the killings on Maidan, the political goals of the fringe group became reality. They joined the storming of Donetsk’s administration buildings, briefly hoisting the Russian flag.[24] Though their first attempt at a self-proclaimed Donetsk People’s Republic lasted only a matter of days before they were removed by riot police, they were at the forefront of what the Kremlin liked to call ‘the Russian Spring’, Russia’s first real answer to pro-democracy movements across the globe. The Donetsk Republic movement led demonstrations which grew rapidly from a few hundred people in the early days of March 2014 into the thousands, as Russian nationalists poured across the border to join them.[25] Ukrainian officials claimed that some were bussed in dressed as tourists, among them military-intelligence officers smuggling in weapons.
By April the demonstrations had become a military insurrection, as hundreds of masked armed men stormed and took over government buildings across Ukraine.[26] Though local public support still seemed to number only in the hundreds, somehow by May, as Ukrainian troops fought to take back control of the regional governments, what began as the protest of a few dozen ‘crazies’ had become an army of suddenly very well-organised and very well-armed pro-Kremlin separatists.[27] The leaders of the Donetsk Republic movement were not forgotten: Andrei Purgin, who’d never before been able to hold down a job, became the first vice prime minister of the self-proclaimed Donetsk People’s Republic,[28] and the military leaders who’d arrived from Moscow joined them to take over the reins of the new separatist republic.[29] The Russian government insisted they were all volunteers, but the ties of some of them to pro-Kremlin oligarchs ran long and deep.
The war in Ukraine, which claimed more than 13,000 lives and became a major crisis for the West, would never have happened without Russian black cash. Some of it was the product of complex laundering schemes, some of simple siphoning. It was a key element in a proxy war in which everything was unofficial: from the Russian military men leading the fight to the weapons they smuggled in. Everything was to be deniable. Nothing was to be traced. Some of the cash for the pro-Kremlin separatists’ insurrection that spring appeared to have been funnelled across the border into Ukraine by the rebels. There had always been a large amount of unofficial trade between Ukraine and Russia, and there was a substantial shadow economy between the two countries, while the border was extremely porous, making any attempt to track the cash movements near-impossible. ‘It was all black cash. It was brought in in suitcases,’ said Batozsky. ‘We weren’t able to catch anyone by the hand.’[30] Ukrainian officials believed much of the early funding for the uprising had been brought in by the Russian secret services, who arrived in the region soon after the annexation of Crimea.
Malofeyev was in the middle of it all. His central Moscow office was not only home to an extensive collection of antique icons and rare tsarist maps, it had also been the workplace of the men who became the leaders of Russia’s covert Ukrainian invasion: Malofeyev’s former security chief, a military-intelligence officer with a pencil moustache known variously as Igor Strelkov, ‘Strelok’, or Igor Girkin,[31] led the ad hoc Russian forces arriving in east Ukraine from Crimea; his burly public relations adviser was the new leader of the Donetsk’s People’s Republic.[32] In November 2013, before the fighting broke out, Malofeyev cashed in his stake in Rostelecom, selling it back to the state company for $700 million so he could concentrate on ‘humanitarian projects’.[33]
Malofeyev’s security chief Igor Strelkov had previously fought in covert wars for Russia in Chechnya and Bosnia,[34] and he ended up being denounced as a ‘monster and a killer’ by Ukraine’s interior minister.[35] In the month before the situation in Ukraine spiralled into chaos, he accompanied Malofeyev on a triumphant tour he organised for the Russian Orthodox Church, bringing the Gifts of the Three Wise Men from an Orthodox monastery in Greece to Moscow, then to Kiev and on to Crimea.[36] Strelkov was ostensibly in charge of security for the ancient gold, frankincense and myrrh as thousands of Orthodox believers flocked to see it. But in Crimea, the two men also had another mission. There they met Sergei Aksyonov, who one month later was to become Crimea’s new pro-Russian leader,[37] raised from obscurity as leader of a tiny pro-Moscow Russian Unity Party almost as suddenly as the unmarked Russian troops appeared on the peninsula.[38] ‘At these exhibitions Malofeyev and Strelkov got to know each other well,’ said Batozsky. ‘There are no witnesses to what happened later on.’[39] At least one former Russian Orthodox Church leader believed the tour of the holy relics was no more than a cover for a reconnaissance mission for everything that lay ahead. ‘The Gifts were brought to Crimea to prepare the ground and collect intelligence,’ said Valery Otstavnykh, who later stepped down from the Church because he feared it was being used as an arm of Putin’s state.[40]
Malofeyev was believed to be the linchpin in funnelling cash to the pro-Kremlin separatists, working through a network of charities connected to his St Vasily the Great fund. Later, the Ukrainian security services leaked what they said were wiretapped phone calls between him and Strelkov, in which the two men discussed successes in fighting the Ukrainian army. According to a transcript of one call, Strelkov tells Malofeyev, ‘From our side, not one position was dropped. All positions in Kramatorsk were held on to. But Konstantin Valerevich, could you tell me who it was exactly we hit?’ Malofeyev responds by saying he’ll pass the news of Strelkov’s successes to the Crimean leader Aksyonov, who is visiting him.[41]
Malofeyev denied that he was involved in the conflict at all, apart from providing funding for refugees fleeing the fighting, and said his ties to the rebel leaders were no more than a ‘coincidence’.[42] But even the EU found that he was involved up to his neck, sanctioning him over his links to the separatists,[43] while the Ukrainian government opened a criminal investigation, claiming he financed terrorists.[44]
For the Kremlin, however, Malofeyev was an ideal foil. His participation gave the Russian government a degree of deniability. They could claim he was a hothead imperialist acting independently. Certainly, in interviews, Malofeyev often couldn’t help himself. ‘I’m sorry for my lack of political correctness,’ he told Bloomberg, ‘but Ukraine is part of Russia … It is an artificial creation on the ruins of the Russian empire.’[45] ‘For Russia this is a battle for historical survival,’ he told me. ‘Russia in its nature is an empire. When the US was only being born it was an empire. And we can’t exist in another quality.’[46] But behind the scenes, his ties to the top of the Kremlin ran long and deep. Besides his friendship with de Pahlen, he’d also built connections to Putin through the Orthodox priest who’d become the president’s confessor, the increasingly powerful Tikhon Shevkunov.[47]
As Malofeyev helped expand Russian influence into east Ukraine, the KGB-connected Geneva money men, who behind the scenes worked with Putin and Timchenko, looked on approvingly. ‘It’s really a religious war,’ said one of them. ‘People from Donetsk and Kharkov, if you look at their ancestors, they’ve always been Russian. They’ve been Russian forever.’[48]
From the start, Malofeyev’s operations seemed connected to Russian intelligence. The telecoms sector, in which he built the bulk of his fortune, had always been the realm of military intelligence. The Kremlin’s support for far-right Russian nationalist groups aiming to fracture Ukraine and prevent it from joining the EU was starting to look like a flashback to Putin’s Soviet days in Dresden. Back then, the KGB (Putin included, according to the two former associates we met before) had run agents deep in German neo-Nazi groups and in the far-left Red Army Faction, which murdered American military officers and titans of West German industry to sow chaos and instability.[49] The Kremlin’s foray into Ukraine seemed like a passage torn from an old KGB playbook to divide and disrupt, to funnel weapons and cash through a series of fronts and middlemen, at a time when the economy of strategic operations was based on smuggling, and nothing seemed to matter to the Soviet leaders apart from the projection of power and the battle for supremacy against the West. Putin’s men were dusting off the tactics they’d used then, when, just as now, Russia was unequal to a direct ground war, and had to resort to feints, proxies, agents of influence and front organisations, to propaganda and outright lies, in order to unbalance its opponent and undermine it from within.
In Soviet times, such tactics were known as ‘active measures’. And by 2014, with Russia having completed the transition to its own distorted version of state capitalism, the Kremlin was ready to take on the West anew. Some of the tactics it honed in Ukraine were fast being expanded first into Eastern Europe and then further into the West. Old networks were being awakened, and new fronts were being put into play.
The Ukrainians had been the first to warn that a resurgent Russia was seeking to sow division in the West. ‘Everyone thought the Russians were just stealing,’ said Konstantin Batozsky, the aide to the former Donetsk governor. ‘But they’re working to create their own circle of corrupt politicians. This has been going on for a long time, and Russia will undermine Europe. Russia is laying a huge bomb in the foundations of the European Union. Russia is looking for vulnerable points to split Europe. This is a gigantic risk today. Russian NGOs are working very actively, giving grants to groups on the ultra left and ultra right.’[50]
In the West, some experts were also becoming increasingly aware that Russia’s black-cash influence operations weren’t limited to Ukraine. ‘Russia is funding the National Front in France, Jobbik in Hungary, the Liga Nord as well as the Five Star movement in Italy,’ Michael Carpenter, then adviser on Russia to US vice president Joe Biden, told me in September 2015. ‘They’ve funded Syriza in Greece and we suspect die Linke in Germany. They’re going after all these anti-establishment parties on the left and right. They are totally promiscuous in that respect, and they use these slush funds to do it. Their goal is to target the European countries to weaken the EU and to break consensus on sanctions. It’s very serious. They’ve spent a lot of time and money on this.’ But such fears were drowned out amid other threats that seemed more immediate and real to policymakers less well-versed in Russia. ‘They told us we had default bias,’ said Carpenter. ‘They said, “You work on Russia, so of course you think Russia is a threat.”’[51]
Exhausted from the Ukraine conflict, the mounting strife in the Middle East and the growing tide of refugees, there was widespread disbelief in the West that Putin’s Russia could penetrate its political and economic institutions. Despite its apparent success in splitting Ukraine, this was largely seen by the West as a Pyrrhic victory. Russia’s economy had long been viewed as a basket case, and its foreign-intelligence service was believed to be emasculated following the Soviet collapse. The money flooding into the West was seen only as stolen cash, not as a vast slush fund that could be used for any strategic agenda.
But across Europe, old KGB networks were being resurrected. While Konstantin Malofeyev was still a child growing up in a Moscow suburb, Serge de Pahlen had been serving undercover in Paris for the KGB as part of a network cultivated by Igor Shchegolev,[52] and had worked with Jean Goutchkov for friendly firms helping equip Soviet industry,[53] while another close White Russian ally, Alexander Trubetskoy, had been part of Shchegolev’s network supplying the Soviets with French computer technology.[54] Now they’d all moved to support Malofeyev: de Pahlen sat on the board of the St Vasily the Great Foundation, and Goutchkov on that of a Malofeyev-linked company.[55] In 2011 Trubetskoy was anointed chairman of Svyazinvest, the state telecoms giant that was subsumed into Rostelecom, which was part-owned by Malofeyev.[56] He also sat on the management board of the St Vasily the Great Foundation, while Shchegolev, as Putin’s minister for communications, oversaw Malofeyev’s business progress.
Without their patronage, Malofeyev might never have got anywhere. They seemed at first to keep a distance as his St Vasily the Great Foundation expanded into Eastern Europe. In the Czech Republic, Malofeyev appeared to run a chaotic campaign to cultivate anti-Western politicians of any political stripe, handing out at least 100,000 euros to a Belarus-born political fixer who attempted to orchestrate the rise to power of pro-Russian groups there, according to leaked emails between the two men.[57] But the leaks exposed only the surface of what was already a sophisticated operation, in which Malofeyev was just one of a web of players. Yakunin, for example, had courted the politician Miloš Zeman long before his election as Czech president in 2013, while Martin Nejedly, the head of the Czech branch of Lukoil, a major Russian oil company loyal to the Kremlin, was a key adviser to Zeman, and a co-founder of the political party that funded Zeman’s presidential campaign.[58] The employees of companies owned by one of the Swiss lawyers in the Bank Rossiya/Roldugin slush fund were also major backers of Zeman,[59] who became a consistent supporter of Putin’s Kremlin: he was one of the first EU leaders to publicly call for EU sanctions against Russia to be rolled back.
In Hungary, Kremlin interests were being supported in the rapid rise of the far-right Jobbik Party, whose fortunes had been transformed since it was struggling on the fringes in 2005. The leaked emails showed that Malofeyev’s political fixer was working with Jobbik as well.[60] But the catalyst that turned it into Hungary’s biggest opposition party was the arrival, apparently out of nowhere, of an enigmatic Hungarian businessman named Béla Kovács, who after years working in Russia joined the party and then promptly saved it from the brink of bankruptcy.[61] Kovács insisted he’d bailed it out with his own funds, but in 2014 Hungarian prosecutors began an investigation into whether he was an agent of the KGB, and the European Parliament was sufficiently convinced to strip him of his immunity as an MEP. The investigation, however, went nowhere: the Hungarian president Viktor Orbán had also become a close ally of the Kremlin.
By supporting political groups on both the far left and right, the Kremlin was latching on to and stoking a rising wave of discontent in Eastern Europe. Now that the former countries of the eastern bloc had been EU members for almost a decade, the lustre of the West and liberalism was beginning to wear off. The yearning for consumer goods after the shortages of the planned economy had long been sated, and Eastern Europe was filled with shining shopping malls and the latest-model iPhones. But the consequences of joining the EU’s liberal order of free movement were deeply felt, and the ghosts of the Soviet past – the network of agents who once worked with the KGB – still pervaded society.
When Russia, fresh from helping to split Ukraine, waded into the Middle East, launching a bombing campaign in Syria in 2015 to protect the regime of long-time Kremlin ally Bashar al-Assad, Europe’s problems only deepened. The bombing further fuelled an already substantial tide of hundreds of thousands of refugees seeking safe haven in Europe. In 2015, more than a million fled Syria to Europe. For Putin’s Kremlin, this presented an opportunity to stoke unrest, hatred and opposition to the ruling liberal order. The Kremlin’s tactics found especially fertile ground in Eastern Europe, where the spread of economic wealth was extremely uneven, and the conservative call of the Russian Orthodox Church against the liberal freedoms of the West found a ready ear.
In Geneva, the Swiss banker close to Timchenko, Jean Goutchkov, openly dreamed of the creation of a Slavic Europe that would merge Poland, the Czech Republic, and Bulgaria with Russia and Ukraine, extend to Hungary, and splinter away from the French- and German-dominated EU.[62] In May 2014, at the height of the Ukraine crisis, Goutchkov claimed that the European Union was doomed and that the French and German leaders wanted to create a new Europe without the troublesome new members from the east. It was only the start of a process that Putin’s men hoped would fracture the EU.
Expanding the tactics it had begun in the East, the Kremlin began sinking resources deep into the West. The Geneva money men, for instance, had long forged ties to the top of the French elite, in particular with the aristocracy. When Gennady Timchenko began to build a relationship with France’s most important energy major, Total, the way was open to further entrench Russian influence at the top of French society. In 2009 Alain Bionda, an avuncular Geneva lawyer who worked closely with Goutchkov and Timchenko, had wined and dined two of Total’s top executives just as Timchenko was buying into Russia’s second-biggest gas producer, Novatek, while in early 2013 Goutchkov attended a breakfast meeting with François Hollande on his first visit to Moscow as French president.[63]
With the help of his Geneva associates, Timchenko cemented these ties by selling a 12 per cent stake in his Novatek and a 20 per cent stake in the company’s liquefied natural-gas project to Total for $4 billion. Two years later, Timchenko was awarded France’s highest honour, the Légion d’honneur. He had also been elected to chair the economic council of the Franco-Russian Chamber of Commerce, a trade body that soon became filled with France’s most senior industrialists as well as the top members of Putin’s KGB capitalism, including Andrei Akimov, the KGB-connected head of Gazprombank, and Sergei Chemezov, Putin’s KGB comrade from the Dresden days who now headed Russia’s state arms monopoly.[64] As the West moved to sanction Russia following its incursion into Crimea, Timchenko and Akimov remained off the EU sanctions list, despite being targeted by the US, while Chemezov somehow remained on the board of the economic council despite facing EU sanctions. Total called for sanctions to be lifted, full stop.
Russia’s efforts were not based only on forging business ties, or on attempts to split Western unity on sanctions. Through state agencies like Rossotrudnichestvo and Russky Mir, a network of think tanks had begun putting down roots deep into Paris. Russia’s Institute for Democracy and Cooperation set up shop on a quiet street in the 7th Arrondissement in 2008. It was meant to be Russia’s answer to the US’s Carnegie Endowment for International Peace, countering negative Western views of Russia and ending what one of its founders said was ‘the Western monopoly’ on defining human rights and Russia’s observance of them. This was part of a PR offensive that began when Putin’s government set up Russia Today, the global English-language TV network aimed at challenging the hegemony of Western channels such as CNN and the BBC.[65] But there was nothing on the stately stone building the institute supposedly occupied to indicate its presence, while its head was a barely concealed Russian intelligence agent – a high-ranking former Soviet-era United Nations diplomat named Natalia Narochnitskaya, who according to one former senior Russian intelligence officer had been working for the KGB since Soviet times. The sharp-suited, bird-like brunette had been a protégée of the spymaster Yevgeny Primakov at the Institute for World Economy in Moscow during the time of the perestroika reforms.[66] While her institute did its bit for propagating the world view of Putin’s KGB men, it also had a sideline in targeting and recruiting future agents of influence.[67] Its funding was obscure – one of its founders could tell the US ambassador to Moscow no more than that it would be supported by, among others, ‘ten businessmen’.[68]
Narochnitskaya was close to Vladimir Yakunin, who through his Russian Orthodox charity, the Foundation of Andrei the First-Called, and his think tank ‘The Dialogue of Civilisations’, was building ties deep into European political circles, including to the top of France’s Republican Party, with which Serge de Pahlen was also connected. In May 2014 de Pahlen and I spoke in his office in Geneva, on the desk of which were strewn a few books from the publishing house he ran (behind which stood an impenetrable investment fund). He told me the days of US hegemony were over. ‘US soft power is failing,’ he said, a gentle giant as he stooped over his desk. ‘They already don’t have it. The days when it dominated the EU are over. Now Russia is big, as is China. The US has no credibility today. What they did in Libya, they are doing the same now in Ukraine. Maybe it is not clear to America that they are a power in decline.’ When I asked whether he was trying to recreate the European influence networks of the Soviet past, he looked at me incredulously before breaking into a wide grin. ‘If you’re talking about lobbying, then yes. Everyone does this.’[69]
Just as the Soviet Union had run financing for political allies and parties across Europe through a network of friendly firms to seek to undermine Western unity in the Cold War days, Moscow was now deploying a new web of front men and proxies to fund political parties on the far left and far right across the West. Parts of the old networks, and some of the money men, Goutchkov and de Pahlen among them, remained, and now were receiving a new influx of cash. In France, Moscow’s focus was mostly on funding political parties on the far right. Though it found a willing advocate on the far left in Jean-Luc Melenchon (he was already avowedly anti-US and anti-NATO without much prodding from Moscow), it was quick to open credit lines for the Front National of Jean-Marie le Pen and his daughter Marine. This source of funding was again made through proxies to give the Kremlin plausible deniability, but some of them were becoming easier to spot. In November 2014, for example, it emerged that Front National had borrowed 9.4 million euros from a Czech bank with links to Gennady Timchenko.[70] (Timchenko’s lawyers said he played no role in the bank’s decision and had never been involved in the bank’s management nor had he ever been a beneficiary of it.) Konstantin Malofeyev, meanwhile, helped set up a further deal to lend 2 million euros to Jean-Marie le Pen.[71] In another instance, a French documentary film-maker shot footage of le Pen entering Malofeyev’s Marshall Capital office in Moscow, and later leaving with an aluminium case. The presumption was that it had been stuffed full of cash, an allegation le Pen (and Malofeyev) hotly denied.[72]
The activity was becoming dizzying. Moscow had long been securing support across Europe. In Germany, Putin had a staunch ally in former chancellor Gerhard Schröder, who was richly rewarded for his labours defending Putin’s actions in Ukraine and Syria, and his clampdown on democracy at home. Together with Matthias Warnig, Putin’s close ally from the Stasi, Schröder was on the board of the Nord Stream gas pipeline consortium, a Russia-led 14.8-billion-euro project to export gas directly from Russia under the Baltic Sea, bypassing Ukraine. In Italy, Putin had long had a friend in Silvio Berlusconi. The two men holidayed in Sardinia together, and Berlusconi was a frequent guest at Putin’s Sochi residence. Berlusconi was also a member of a financial and influence network that had existed back in Soviet times. In the late eighties his Fininvest publishing house won air time from the Soviet state television corporation to broadcast Italian films.[73] He also worked closely with the banker Antonio Fallico, who knew the Communist Party’s foreign funding operations intimately, and whose Intesa Bank continued to be a major financial backer of Putin’s KGB capitalism. When an apparent attempt by a Gazprom-linked intermediary to funnel money Berlusconi’s way was uncovered by the Italian parliament, politicians in both Berlusconi’s party and the opposition told the US ambassador in Rome that they believed it was not the only Kremlin scheme intended for Berlusconi’s personal benefit.[74]
While these relationships had long been known about, Russia’s activities in the West were clearly entering a much more active phase. Across Europe, Malofeyev was promoting a right-wing populist agenda, a rebellion against the liberal establishment. In June 2014 he hosted a conference for right-wing forces in Vienna at which Marine le Pen’s niece Marion had mingled with the leaders of Austria’s right-wing Freedom Party and Bulgaria’s far-right Ataka party, as well as with Serge de Pahlen.[75] Malofeyev always insisted he was promoting a religious agenda, as a supporter and protector of Christians, not a political one.[76] But the fingerprints of his allies were also everywhere in the rise of Syriza, the radical left-wing party that swept to power in Greece in January 2015: leaked emails revealed that the Eurasianist Alexander Dugin, who worked with Malofeyev, had assisted it on strategy and PR. Malofeyev also developed close ties with the right-wing Independent Greeks headed by Panos Kammenos, a firebrand nationalist who became Greece’s defence minister.[77] Kammenos had been a frequent visitor to Moscow, forging a close friendship with Malofeyev, while his Athens-based Institute for Geopolitical Studies had signed a ‘memorandum of understanding’ for cooperation with the influential Russian Institute for Strategic Studies, which also worked closely with Natalia Narochnitskaya’s outfit in Paris and essentially was an arm of Russian foreign intelligence.[78]
None of these activities stopped when the US and Europe imposed sanctions against Russia in March 2014. Instead, Russia only accelerated and intensified its efforts to split the West. Alliances were deepened in Italy, for instance, where another Malofeyev associate worked closely with Gianluca Savoini, a top aide to the head of the far-right Liga Nord party, Matteo Salvini.[79] Together they created the Lombardy Russia Cultural Association, which began promoting Kremlin-friendly right-wing views and then aimed to ‘change all of Europe’.[80] Along the way, Savoini explored Kremlin-linked oil deals to fund Liga Nord’s election campaign, first discussing sales via a little-known oil company, Avangard – which, according to an investigation by the Italian magazine L’Espresso, happened to have the same address as Malofeyev’s downtown Moscow office.[81] Savoini then discussed a deal to channel tens of millions of euros to the party through oil sales from Rosneft, via an intermediary, to Italy’s Eni.[82] These deals were to be structured in the same way as the KGB-led Communist Party foreign financing deals of old. The oil was to be sold through a middleman at a discounted price, allowing the intermediary to keep the difference and funnel the proceeds (about $65 million over the course of a year) into the coffers of Liga Nord, BuzzFeed reported. ‘This is just the same as the financing deals we did through the friendly firms,’ said one former senior KGB officer involved in Soviet-era oil trading deals.[83]
Salvini denied that the deal had ever gone ahead. But according to a transcript of the discussions published by BuzzFeed, his aide Savoini had made it clear that the alliance being forged as a result of the proposed deal should become a fulcrum for a pro-Russian coalition across Europe. ‘The new Europe must be close to Russia because we want to have our sovereignty,’ he said. ‘We must not depend on the decisions made by the Illuminati in Brussels or in the US. Salvini is the first man who wants to change all of Europe … Together with our allies,’ he continued, listing other far-right pro-Kremlin parties such as Austria’s Freedom Party, the Alternative für Deutschland in Germany and Marine le Pen’s Rassemblement National in France. ‘We really want to have a great alliance with these parties that are pro-Russia.’[84]
Instead of trying to remove the sanctions by adhering to the Western liberal-dominated, rules-based order, Putin’s Russia was going to try and buy its way out of them. But the aim also went much deeper than that. Putin’s men were seeking to forge their own bloc within Europe, and subvert the political landscape of the entire continent. And politicians from many far-right political groups were only too willing to receive the Kremlin’s black cash and influence. In Austria, the head of the Freedom Party, Heinz-Christian Strache, was forced to resign after a video was leaked of a booze-fuelled meeting at a villa in Ibiza at which he sought political support from a woman who said she was the niece of a Russian gas tycoon.[85] Strache had offered lucrative government contracts in return for support in elections, including via a Russian takeover of Austria’s biggest newspaper, the Kronen Zeitung. All objections to Russia’s rebellion among Western-leaning tycoons had been overridden by Putin and his men long before. In the immediate aftermath of the March 2014 sanctions, Putin met behind closed doors with leading titans of Russian industry. One of them tried respectfully to explain to him that having such sanctions when Russia now existed in a global world was not a good outcome. This opinion was met with fists banged on the table. Putin told them he didn’t care whether they liked it or not. ‘It will be,’ he said, according to a Geneva associate of one of the oligarchs who’d been present.[86] The tycoons might have been personally disappointed, but they had no choice but to accept it. In the euphoria that followed the takeover of Crimea, patriotism trumped everything.
Timchenko, for one, was said by friends to be devastated when he found himself on the US sanctions list. He’d always dreamed of being an international businessman. He packed his bags in Geneva, leaving his ornate mansion in the salubrious lakeside suburb of Cologny. Fearing what he called ‘provocations’ from the US, perhaps even arrest as the Department of Justice reportedly launched a money-laundering probe into Timchenko’s operations,[87] he didn’t dare venture westward out of Russia into Europe, even though he’d avoided being on the EU sanctions list. Instead he flew east, to China, where with the help of Alain Bionda, the Geneva lawyer who worked with Timchenko and Goutchkov, he began cultivating ties with the leadership.[88] His Gulfstream private jet had been grounded by the sanctions due to its US make. (Its pilots weren’t able to use the built-in navigation maps, and the US Gulfstream corporation annulled its contract to service the plane.)[89] But business otherwise continued largely as usual.
Timchenko’s reach into Western policy circles was such that, it seems, he may have found out about the US sanctions ahead of time. A few days before they were announced, a small group of people worked late into the night in Bionda’s office in Geneva’s financial district, urgently restructuring the holding company of one of Bionda’s Russian clients. ‘The entire team was here,’ said one of those present. ‘The room was filled with cigar smoke. One of the clients was getting very worried about the sanctions. He was told he was on the expanded list.’[90] Bionda denied that this activity had anything to do with Timchenko, but when the sanctions were announced the following day, Timchenko’s Gunvor oil trader was prepared. It announced that Timchenko had sold his stake in the company to his Swedish business partner Torbjorn Tornqvist, allowing Gunvor to continue operating despite the sanctions. According to one of Bionda’s associates, the deal was ‘a fronting operation’: ‘The banks had stopped all credit lines until they made the announcement. The problem was, all their trading is in dollars. But as soon as they announced they’d sold the stake, the problems went away.’[91] (Timchenko said Bionda had no involvement in the transaction and that negotiations on the sale had begun ‘long before’ the sanctions were announced. Any suggestion the sale was no more than a ‘fronting operation’ was completely false, he said.)
The sanctions made life more difficult. Bank accounts were opened in China and Hong Kong. Restructurings were undertaken. Jean Goutchkov quietly retired from his post as head of private banking at Société Générale in Geneva, apparently concerned about scrutiny of his ties to Timchenko.[92] ‘Today these type of connections put you in jeopardy,’ said one of his associates.[93] But the sanctions didn’t stop business, or the Geneva money men’s influence-peddling. Bionda, for example, had always liked to schmooze titans of the global energy industry through the stake one of his companies owned in the Lotus Formula One racing team. ‘If you’re in Shanghai or Singapore, it’s great for the oil industry executives to come with their mistresses. It’s good in this respect,’ said one of the Geneva money men.[94] After the sanctions, one of Bionda’s connections funnelled money to Britain’s Conservative Party.
Through his connections with Timchenko and Goutchkov, Bionda had long been at the nexus between Russian money and power. From his office at No. 1 Place du Port, the gateway to Geneva’s financial district, he owned a stake in a company called Genii Energy. His partner in Genii, and in the Lotus Formula One team, was a Spaniard named Gerard Lopez, who’d made his first billion through investment in Skype and who then became close friends with the Russian president, spending time with him at his summer residence, feeding apples to his pets and listening to piano music.[95] Another company Lopez invested in, Rise Capital, soon began receiving billions of dollars in Russian state contracts. As the UK hurtled towards its referendum on membership of the EU in June 2016, Lopez made a surprising donation of £400,000 to the Conservative Party. No questions were asked.[96]
It was part of a flood of Russian cash that had been entering British politics, including from two prominent men with close connections to the KGB who’d also been donating heavily to the Tory Party. One of them was Alexander Temerko, the garrulous one-time Yukos shareholder who’d started out in business at the top of the Russian state-owned arms industry. After remaining in Russia to negotiate with the Kremlin while the other Yukos shareholders fled, he’d acquired British citizenship in 2011, and poured more than £1 million into Tory coffers. Portraying himself as a dissident critic of the Putin regime, in private he continued to praise senior members of the Russian security establishment, including the powerful Security Council chief Nikolai Patrushev. He wined and dined Tory Party grandees, forging a close relationship with Boris Johnson, who spearheaded the campaign to leave the EU. In public he claimed to be against Brexit, but privately, from time to time, he would laud it as ‘a revolution against bureaucracy’, while all his closest allies were leading Brexiteers. Former business partners said he had long-standing ties with the Russian security services. Leonid Nevzlin, the former leading Yukos shareholder, said Temerko had originally been brought into Yukos for his ties with the Russian ‘Federal Security Service and the Defence Ministry’, adding that Temerko knew Patrushev ‘well’.[97]
But mostly the Russian activity seemed directed at British businessmen who’d appeared out of nowhere to lead funding for the campaign pushing for Britain to leave the EU. One of them was Arron Banks, a brash millionaire who initially made his wealth in the insurance business and then expanded into diamond mines in South Africa. Banks’s wife had arrived in the UK in the late nineties as a young Russian woman on a student visa, and had narrowly avoided deportation after suspicions were raised by her first marriage, to a retired merchant seaman more than twice her age.[98] (After being briefly investigated by Special Branch she’d bought the car number plate ‘XMI5 SPY’.) Banks was the biggest funder of the Leave.EU campaign, donating £8.4 million. But a parliamentary committee investigating the referendum said he’d never made it clear where this money had come from. The Electoral Commission referred a case to the National Crime Agency, believing it had reasonable grounds to conclude that Banks was not the ‘true source’ of the funds. But the NCA came back empty-handed, saying it had not found any evidence any laws had been broken.[99] Banks had raised the funds by borrowing £6 million from an Isle of Man company he majority-owned, Rock Holdings Ltd, a loan that the NCA said Banks was legally entitled to take. But both the Electoral Commission and Transparency International slammed the investigation as demonstrating a ‘weakness’ in UK laws that opened the way for overseas funding into UK politics.[100] Banks has repeatedly and vehemently denied any business connections with Russia. Speculation had first begun to swirl after leaked emails revealed that he met senior Russian diplomats in the months before the referendum, and was offered a series of lucrative Russian business deals, which Banks said he never acted on.[101] While the ultimate source of the Rock Holdings cash may remain unidentified, Banks’s closest business partner had his own connections. Jim Mellon, the co-owner with Banks of the sprawling Manx Financial Group (owned by Banks through Rock Holdings), was a founder of an investment fund that made hundreds of millions of dollars investing in the Russian stock market in the nineties. More recently, Mellon continued to hold a near 20 per cent stake in another Russia-focused fund, Charlemagne Capital, that worked closely as a co-investor with the Kremlin’s sovereign wealth fund right up until the end of 2016.[102]
The stakes were being placed for division as Europe was heading into its most turbulent time since the end of the Cold War.
*
When we met – in St Petersburg and Moscow, and later in London, where his son had acquired British citizenship – Vladimir Yakunin liked to portray himself and the Putin regime as fighters for conservative values that had been abandoned in the West’s pursuit of globalisation. He was the avuncular patriot who just happened to disagree with much of the West.
One of our first meetings was in June 2013, just after the Kremlin-ruled Russian parliament passed legislation banning the distribution of ‘propaganda of non-traditional sexual relationships’ among minors. The law provoked widespread criticism in Europe for reinforcing Russia’s already deep homophobia: gay men were regularly subjected to beatings, and later in Chechnya they would be rounded up, imprisoned and tortured. But Yakunin was proud of the law, and claimed that many European politicians had privately told him they wanted similar legislation. ‘Representatives of French social organisations who demonstrated against the same-sex marriage law told me they are looking at Russia as if it is the only stronghold that can stop this depravity,’ he said. ‘They were not expecting that their words would be conveyed to Putin. They were not counting on any reward. They were just speaking of their despair. I am very often in Greece. Today practically there is not one Greek who if he knows you are Russian would not say, “We are counting on you from the point of view of defence of Orthodoxy.” And when I meet with Western partners and politicians they say we objectively understand that today Russia is the leading positive force that can stop humanity from falling into the abyss. This is not flattery of Putin. It is just statement of fact.’[103]
This so-called defence of ‘family’ values against the tolerance and liberalism of the West was becoming the Putin regime’s leitmotif in shoring up support among far-right nationalists and conservatives across Russia, Europe and the US. Yakunin was one of the first of the KGB men close to Putin to make a display of converting to Russian Orthodoxy after spending most of their career defending the officially atheist Soviet state. His charity, Andrei the First-Called, lavished money on restoring Russian Orthodox monasteries and outposts of the Church’s empire. Konstantin Malofeyev also claimed to be defending Christian values against Western depravity, and he and Yakunin joined forces to hold an event in Moscow in September 2014 for the World Congress of Families, an obscure US-based anti-gay organisation that was forging close links with America’s powerful evangelical movement.[104] Malofeyev told the gathering, which took place despite the new US sanctions regime, and included prominent members of France’s Front National and Austria’s far-right Freedom Party, that the world was witnessing ‘an unprecedented triumph of Orthodoxy’, and that Russia was a bastion defending Christian values against the secularism of the West.[105]
Most of this newfound religious zeal was in fact no more than cover. Inside Russia, the joining of Church and state was just another element of the erosion of any remnants of democracy; the swerve to Orthodoxy by the ruling elite enabled them to crack down further on anyone operating outside their system. ‘I call them the Orthodox Taliban,’ said Lyudmilla Narusova, the widow of Putin’s one-time mentor Anatoly Sobchak. ‘It’s a return to some kind of Middle Ages. They are using religion to undermine the constitution, and the fundamental rights of Russian citizens.’[106]
For Yakunin and others in Putin’s inner circle, this tactic had been long ingrained. When Yakunin started out in the KGB, he joined the department fighting against dissidents, against gays, against anyone who thought differently.[107] Now they were using the same tactics to infiltrate Western politics. The link with the World Congress of Families was one of the vehicles that allowed Putin’s people to make the leap into the US conservative right. Yakunin was also forging close ties with Dana Rohrabacher, a Republican member of Congress who became well known for his pro-Putin views,[108] while Malofeyev and Serge de Pahlen were building a relationship through the pro-life movement with Rand Paul, the Republican senator whose libertarian father Ron Paul had been an inspiration to the Tea Party.[109]
These tactics were, once again, pulled from the playbook of Soviet times, when the KGB had infiltrated the US anti-nuclear movement and the protests against the war in Vietnam. But now Putin’s allies were appealing to base populism, to prejudices against immigrants and minorities. It was a seductive message to many who felt left behind by the rush of globalisation and multiculturalism, and were nostalgic for what seemed like simpler days – a contingent that had been growing in number ever since the 2008 financial crash increased the divide between rich and poor.
But even Yakunin had to admit that what he called a ‘battle of civilisations’ was in reality no more than a new ideological cover for the same old geopolitical battle for supremacy that Russia had been waging against the West since the onset of the Cold War: ‘If before it was a battle of two ideologies – the Communist versus the capitalist … today it is the conflict of ideas of a humanist society of traditions versus absolute consumerism. I’m not going to argue with you,’ he said, ‘that this battle is used by Russia to restore its global position. Of course the battle of ideas is always a form of state policy and should follow a concrete aim. But I should return to Putin’s Munich speech,’ he said, unable to help referring to the moment in 2007 when Putin first reeled off the deep grievances of his KGB clan against the West: the expansion of NATO to Russia’s borders, the anti-missile defence system in Romania and Poland, and the string of colour revolutions that turned former Soviet republics in a Westward direction. ‘Putin spoke openly then of what was worrying Russia. He didn’t hide it. He didn’t send the Russian secret services anywhere … He came out and said, “Guys, this is what we’re worried about. This is unjust.” And after that they made him an outcast. They rejected him. You understand?’[110]
This was the explanation for Russia’s increasing activity, the motivation behind the Kremlin’s efforts to divide and disrupt the West, to shatter the post-Cold War order. Putin had asked for a seat for Russia at the top table of global security, and felt he’d been resoundingly ignored. While Barack Obama made overtures to Dmitry Medvedev during his term as president, the US administration had kept its distance from Putin and his security men, as if hoping to relegate them to a past era. Putin believed the US had a hand in stirring up the protests against him when he returned to power.
Putin had warned in his Munich speech that the West should take note of the rise of the emerging economies of Russia, India and China. The West had always viewed Russia’s economy as a resource-based basket case, incapable of the productivity gains of the West. But to see Russia through that prism was to miss the short-term ambitions of Putin’s security men. They didn’t particularly care about the economic well-being of their country’s people, as long as the economy was secure enough to allow them to hold on to power – and to project power globally. Russia’s GDP was now $1.6 trillion, and Putin’s KGB men had half as much, or more, stashed away in offshore bank accounts.
This was a point that Yakunin liked to make from time to time, although he was careful to do so a little more subtly. He would tell a story of how in the early days of his presidency Putin and his inner circle met with Zbigniew Brzezinski, the Cold War-era US national security adviser, who mentioned, with a sorry shake of his head, the billions of dollars held in overseas accounts by the Russian elite. Brzezinski asked, if all that money was in accounts in the West, then whose elite was it anyway? – suggesting that they were now under Western control. The Russians had been furious at such comments from a Cold War warrior. But now, Yakunin said quietly, ‘the backdrop has changed’.[111] This money was now mostly under the control of Putin’s men.
Some commentators have suggested that the leaking of the Panama Papers, with their details of Putin’s crony bank accounts, was the reason Putin began meddling in Western politics. But that was to miss the point. The battle of Putin’s KGB men with the West had been brewing long before. It was being prepared even before the Soviet Union collapsed, when parts of the KGB sought to preserve their networks after the transition to the market economy, helping factions to later plot and assist Putin in his ascent to power.
‘Bush announced victory in the Cold War, and that was it,’ said Yakunin. ‘If they are the victors, they decided they can dictate. But suddenly it turned out that not everyone is ready to live according to this order. Putin’s efforts were rejected out of hand. Now today we are all reaping the fruits of this short-sighted policy of the West.’ The sanctions imposed by the West in the wake of Russia’s incursion into Ukraine had only deepened and accelerated the standoff, he said. ‘You know Russians well. We can be lazy, we can be drunk. We can pierce ourselves until blood comes out. But as soon as there is an external threat, then this is written in our genetic code, independent of whether we are young or old: we fight back. Sanctions did more for unifying Russian society than any information campaign of the Kremlin. Why should we just sit back and wipe ourselves when we are being spat on? Imposing sanctions was like a declaration of war.’[112]
*
As Russia hurtled deeper into standoff with the West, some in the Obama administration became increasingly alarmed about the Putin regime’s capacities. One of the most vocal at the time was vice president Joe Biden, who warned of how the Kremlin had generated the ability to direct loyal oligarchs to carry out geopolitical strategic operations, and was using corruption as a power to undermine democratic regimes. ‘Corruption is the new tool of foreign policy,’ said Biden. ‘It’s never been as handy and as useful in the hands of nations who want to disrupt and oligarchs that respond to them. It’s like the kryptonite of a functioning democracy … The stakes are strategic as well as economic, because Russia and others are using corruption and oligarchs as tools of coercion.’[113]
For Western experts on Russia there was a gradual reckoning. Inside the US Department of Justice and the FBI, the first real wake-up calls about the true nature of the Putin regime came first in November 2006, with the excruciating death by polonium poisoning in London of Alexander Litvinenko, a former FSB officer close to Boris Berezovsky, and then with the investigation into the Russian mafia Litvinenko had been working on in Spain. There, with his assistance, prosecutors had rounded up a Russian money-laundering ring that involved leading members of the Tambov organised-crime group, which Putin had worked closely with in the St Petersburg years. What they uncovered, including from wiretaps of the mobsters’ phone calls, was flabbergasting. The heads of the group, who included Gennady Petrov, a former shareholder in Bank Rossiya, were in regular contact with leading members of Russian law enforcement. One call to them could deflect a Russian investigation that was getting too close, another could help put pressure on customs officials to allow shipments through the St Petersburg sea port, still a gateway for drug supplies into Europe. Payments to senior law enforcers would get rivals arrested and remove incriminating evidence from government databases, while Petrov was in regular communication with the Russian defence minister, who also hailed from St Petersburg.[114]
Russia, the Spanish prosecutor leading the investigation told his counterparts in the US Department of Justice, was a ‘virtual mafia state’.[115] The alliance that began in the St Petersburg mayor’s office had extended its power across the whole of Russia, with organised crime entwined with the highest levels of the security services. The Tambov group’s activities in Spain included drug running and weapons smuggling: its outpost there, said former military-intelligence officer Anton Surikov, was key to overseeing black channels of arms sales into Syria and Iran.[116]
The growing concerns about the fusion of Russian organised crime with the highest levels of government coincided with an increasing awareness of Russian intelligence activity in the West. In 2010, the FBI rounded up ten Russians it accused of acting as agents for Russian foreign intelligence, including a flame-haired femme fatale named Anna Chapman who’d run an online real-estate broker in New York, all the while seeking top-level political contacts. Eight of them were accused of acting under deep cover as ‘illegals’, assuming fake identities and appearing to live normal American lives. The activities of the spy ring were dismissed by many commentators as demonstrating no more than how much Russian foreign-intelligence capacities had degraded since the end of the Cold War. But for former Western intelligence officers the affair was a sign that the networks of Russia’s foreign intelligence were far from moribund. The group they’d arrested was just the ‘tip of the iceberg’, said one.[117] ‘The number of Russian intelligence operatives in the US is much higher than anyone thought,’ said another.[118]
But the Obama administration, still intent on the reset of relations with Russia that it had embarked on under the Medvedev presidency, chose to wave aside many of the experts’ concerns. ‘There was a real interest in the reset,’ said Frank Montoya Jnr, the then head of the FBI’s counter-intelligence division. ‘It was partly based on the thought they could try to influence through Medvedev, and it would be a different world.’[119]
By the time vice president Biden sounded his warning in 2015, the world was soon to discover that the threat posed to Western unity went far deeper than he suggested. The weaknesses of the Western political system had left a deep imprint in society. Increasing inequality and the politics of austerity that followed the 2008 financial crisis had left the West wide open to Russia’s aggressive new tactics of fuelling the far right and far left. ‘We were seeing a new boldness in Georgia, Crimea and the Baltics,’ said Montoya. ‘There was a lot of concern that they could turn against us. But that was dismissed, because they’d never done that. But then all of a sudden it exploded.’
When the UK woke up on June 24 2016 to the shock referendum result that put a majority in favour of leaving the European Union, the post-Cold War order entered uncharted territory. In the US, the forthcoming presidential election was also shaping up to be a referendum on the established order. A widespread feeling that the ruling elite had abandoned and forgotten the American heartland and the working class had left the way open for a celebrity real-estate mogul to become the leading Republican candidate. ‘If Donald Trump wins, then he’ll bury the EU,’ said Alexander Temerko, the former Russian arms tycoon who’d cultivated close ties to leading members of the Leave campaign in Britain. ‘That will be it for the Transatlantic alliance.’[120]